Overview of proposed privatization of Electricity Sector in Ghana

The Ghana government has identified the problem as a distribution problem. According to President John Mahama, “there is inefficiency at the downstream distribution of the electricity sector. The system is not working. If it’s not working you fix it by taking risk”.  This analysis feeds into the government’s argument that the Electricity Company of Ghana (ECG) is the problem and that to solve the problem, ECG needs to be privatized.

However, there are two other major problems with the electricity sector:

• Shortage of supply
• Non-payment of bills with government entities the biggest defaulter

Tariffs have already increased nearly 600% over the past decade, and with the privatization of ECG, will likely increase even more as a privatized ECG emphasizes cost recovery and the reduction of technical, commercial and collection losses. 

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